Coffee more expensive than newspaper or share in newspaper company Photograph: Linda Nylind for the Guardian Linda Nylind/Guardian

We raised the tantalising prospect of a Mirror-Mail tie up last week, which is a delicious thought for anybody thinking about a realignment of forces on Fleet Street. The idea, if you weren't paying attention, was that Trinity Mirror (the Mirror's parent company) would take control of Daily Mail and General Trust's regional newspaper business in return for giving DMGT cash and shares. End result would have been the Daily Mail company owning a chunk of Trinity Mirror and an indirect link between Britain's number two and number three papers as measured by sales.

I've learned a bit more since – well, that the key problem for the deal is Trinity Mirror's generally beleaguered share price. You can see what I mean below, but the essential point is that shares trading at 160p before the election collapsed immediately after George Osborne frightened us all with warnings about public expenditure cuts, and after a mini-recovery, are, well less than half that level now. (Only the Daily Mirror itself, at 45p a day, is cheaper.) All of which values Trinity Mirror at a fairly underwhelming £185m – which creates a problem if the company wants to use its shares as currency.

Price of one share is still higher than price of tabloid newspaper...just. Source: Yahoo! Finance guardian.co.uk

Then you have to ask what DMGT's regional newspaper division could be worth. Viscounts and other readers need to quickly forget that DMGT walked away from an offer from Gannett understood to be worth more than £1bn back in 2006, and face up to the cold hard realities of local newsapers today. The easy part is to look at the size of the Northcliffe business – revenues of £294m and operating profit of £30m in the year just closed, which ends for no very good reason on October 3.

Now we are onto valuation. Well, let's make a comparison with Trinity Mirror. Trinity Mirror (yes there's a national title in there, but plenty of regionals too) is expected to produce about £120m of operating profit this year. Compare that to the company's enterprise value: debt of £308m plus sales of £185m equals £493m – and a rather dismal valuation multiple of, well, four times. But anyway, that's what the market thinks newspapers are worth.

So back to Northcliffe. Now some spinners claim that Northcliffe is only worth £60m, which is clearly not the case. But on a debt-free basis, the whole portfolio may only justify a price tag of £120m, which is so lousy that DMGT might only be willing to contemplate a deal if it could take at least some paper. At least then, if the economy recovers, DMGT participates in any upside the Trinity Mirror share price can muster.

However, even at these burnt out levels, Trinity Mirror could not pull off a merger in which it took on all of Northcliffe in an all-paper deal. DMGT would have to take on perhaps 40% of Trinity Mirror, maybe more if Sly Bailey wanted to sweeten her new found friends in Kensington. But you can't see Mail shareholders/executives wanting that much. The whole point of the deal would be reduce DMGT's exposure to newspapers, not increase it.

So, a more credible scenario would be for Sly to offer a shareholding of say 20%, but that only produces a paper valuation of £46m. She, or rather her company, would have to find, what, another £100m in cash (read debt) to complete a buyout which Trinity shareholders are unlikely to rush to embrace.

All this, mind, is before we have even got down to any of the other difficult questions. There's the Northcliffe press pension fund. There's a massive issue as to whether the deal could get past the competition watchdogs who will be all over the transaction. Then there's the issue of keeping everybody's shareholders happy. But these are second order points. If you can't get past the problem of valuation, you can't even have a shot at solving all the other problems.